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American Farm Bureau not dumping direct payments

• While the Iowa Farm Bureau has voted to recommend eliminating direct payments in the 2012 law, the national Farm Bureau organization is a “long way” from endorsing such a move.
• The debate over direct payments, which account for about $5 billion a year in federal spending, has increasingly taken a north-south tone. Farmers in the Mid-South contend the direct payments are built into the collateral for their operating loans. Northern Corn Belt producers believe the payments would be better spent for county-based ACRE payments.

American Farm Bureau Federation leaders know passing a new farm bill in the current budget environment will be difficult. But those leaders are not yet ready to give up on farm program benefits such as direct payments, an AFBF spokesman said.

While the Iowa Farm Bureau has voted to recommend eliminating direct payments in the 2012 law, the national Farm Bureau organization is a “long way” from endorsing such a move, says Tara Smith, director of congressional relations with AFBF.

Smith’s comments came at a farm policy session at the USA Rice Outlook Conference in Biloxi, Miss. Smith was joined by Joe Outlaw, co-director of the Agricultural and Food Policy Center at Texas A&M University; Gary Adams, vice-president for economics and policy analysis at the National Cotton Council; and the USA Rice Federation’s Reece Langley.

“We’re a grass roots organization, and we certainly have some states that have gone down that path,” said Smith, referring to the vote by the Iowa Farm Bureau’s delegate body. “We have other states that vehemently oppose going down that path.”

The debate over direct payments, which account for about $5 billion a year in federal spending, has increasingly taken a north-south tone. Farmers in the Mid-South contend the direct payments are built into the collateral for their operating loans. Northern Corn Belt producers believe the payments would be better spent for county-based ACRE payments.

“The beauty of being a grassroots organization is that farm policy issues work their way up the organization,” said Smith. “We’ll ultimately have a delegate body that will meet in Atlanta in January. They will decide as a whole what policies they want to be our priorities, and we’ll move forward.”

(The American Farm Bureau Federations Resolutions Committee is scheduled to meet in Washington to further analyze the organization’s farm policy options the week of Dec. 13.)

Huge budget deficits

Both Smith and Outlaw presented slides showing the progression of the federal budget deficit over the last 20 years. Congress faces back-to-back years of huge deficits following a few years of budget surpluses in the late 1990s.

“Basically, it’s going to take a whole year’s worth of work by everyone in the United States to pay what we owe other people,” said Outlaw, who is considered by many observers to be one of the leading farm policy analysts in the nation.

All three of the speakers said they anticipate major efforts to reduce farm program spending in the 2012 farm bill even though, Outlaw said, “I think we can make a strong case that the people in agriculture have already given their share of deficit reduction.”

“I think we’re going to be under extreme budget pressure when we start the next farm bill,” said Smith. “We have a lot of programs (38) that were included in the last farm bill that we don’t have a budget for after this year.

“We have deficit reduction task forces out there that are trying to cut money from farm programs. We’ve already seen other pieces of legislation dip into farm bill funds to pay for their programs. So I think the overarching theme of the next farm bill is going to be the budget constraints that we’re going to be under.”

Outlaw said agriculture, in effect, lost $6 billion in spending when USDA reconfigured the standard reinsurance agreement with private crop insurance. That action may be encouraging others to take aim at farm program spending.

A group of congressmen led by Rep. Ron Kind, D-Wis., has sent a letter to current House Agriculture Committee Chairman Collin Peterson, D-Minn., and ranking member Frank Lucas, R-Okla., asking them to began the process of “cutting wasteful spending” from the next farm bill.

“The number $20 billion a year keeps coming up as the amount of money being spent on farm programs annually,” said Outlaw. “That number is out-of-date and irrelevant. But we’ve got people going to Washington to make changes who have the numbers wrong.

“What it comes down to is a lot of people who know nothing about what the safety net means to you who are going to try to write farm policy in the next two years.”